Fuel Reimbursement- which is my best option

simmo0020

I'm negotiating a new deal and have been offered essentially 2 options for fuel reimbursement for travelling I have to do for site visits etc. I drive a 2.0 diesel car, averages 45mpg.

1 - Pay for fuel myself and then claim back 10p per mile at the end of each month. (I understand I can then claim tax relief on the difference between that and 45p)

2. - Use a company credit card to pay for the fuel when I am travelling on business. (Can I then claim tax relief on this?)

I'm a basic rate tax payer, married, not sure if any of that makes a difference or not.

Which option will I be best off taking? I'm attracted to option 2 so that I am not having to fork out for the fuel out of my own pocket and wait for it to be reimbursed but obviously I want to do what is best financially long term.

Darksparkle

Is it a company car or a personal car?

How many business/personal miles are you likely to do?

simmo0020

Sorry should have said

Personal car, approx 7-10k business per annum, personal approx 5k per annum

getmore4less

Personal car 10ppm

tell them to get lost and provide transport.

no where near enough to cover the costs you will be subsidizing the travel.

(or have you forgot to tell you get a car allowances as well?)

simmo0020

Sorry yes I'm really terrible at this lol

I get a £6k a year car allowance.

I'm solely interested in knowing which method of buying the fuel is best

getmore4less

10ppm 45mpg.

1ltr is 0.219969gal

1ltr does 9.8986 miles

if the price is over 99ppl take the card.


edit :

add the 20% tax relief on 35p, another 7p
that makes the break even £1.68pl

so depends on the tax relief available if any on the fuel card.

simmo0020

So take the card, I can then claim 45p per mile in tax relief at year end up to 10,000 business miles then 25p after 10k is that correct?

That means I should get £900 in tax relief if I do 10k business miles?

getmore4less

you will have to check the tax situation for a fuel card.

I think it depends on how you account for the fuel used for private mileage

I also suspect if you have a fuel card you can't then claim the tax relief on the business miles.

if that is the case you need to adjust the break even cost per litre.

you need to have a good read of the HMRC rules on this with using a fuel card
Advisory Fuel Rates
Approved Mileage Allowance Payments

edit:
added the tax relieve in previous post for the AMAP.

redpete

Presumably the company pays the bill directly if you use the company credit card, so no additional tax relief for you on that.

Not sure that I'd like to have to differentiate whether I'm filling the car with diesel for business or private use in order to decide whether or not to use the company card.

Taking all mileage-related costs into account (fuel, tyres, servicing, depreciation) I reckon it costs me 22.5 pence/mile for a similar car. I currently get 11 pence per mile in expenses, with the tax relief as a 40% tax payer I get slightly above this so the car allowance is profit.